For more than a century, it has been the sole raison d'être of this tiny, jungle-clad island. Of all the gifts nature bestowed on Christmas Island, phosphate has been by far the most lucrative.

Since the 1890s, the powdery soil – the legacy of millions of years of bird droppings – has been dug from beneath the island's monsoon forests and shipped around the world as fertilizer.

But now, the Australian government, which administers remote Christmas Island as an external territory, has said enough is enough.

Canberra, Australia's capital, decreed in April that there will be no expansion of phosphate mining on the island, which lies in the Indian Ocean, closer to Indonesia than to Australia. Remaining leases on mining grounds would be allowed to continue, but once they are exhausted in two to three years, the 100-year-old industry will be forced to close down.

The ruling has dismayed many of the 1,200 islanders, who fear a mass exodus as 140 mine employees, their families, and dozens of dependent businesses are forced to leave in search of jobs.

Besides the economic toll, closing the mines on Christmas Island could also shatter one of Australia's most unique cultural communities. Christmas Islanders fear that their unique mélange of European and Asian cultures now faces extinction.

"You have to weigh the environmental impact with the social impact," says Alfred Chong, a manager of one of the mines, rattling down a rough dirt road in a four-wheel-drive vehicle as fat drops of tropical rain hammer on the roof. "A lot of the older workers don't even speak English – they won't get new jobs in Australia."

Phosphate Resources Ltd., the island's largest employer, challenged the government in federal court on July 13 for the rights to continue mining.

In his decision, environment minister, Malcolm Turnbull, said new mining would destroy 670 acres of rain forest and impose "an unacceptable impact" on rare species, including seabirds such as the Abbott's booby and the Christmas Island frigate bird, as well as an endemic species of bat.

"The environmental values that have been identified in the past need to be protected in the future," said Labor's environment spokesman, Peter Garrett, a former rock star with the band Midnight Oil and a passionate conservationist. "We do not oppose the decision."

Many islanders now predict a grim future for this outpost of Australia on the edge of Asia.

"Without the mine, this island is nothing," says Don Newton, while serving up eggs and bacon in the Rockfall Café, which overlooks the shimmering blue haze of the Indian Ocean.

"If they're going to take away the mining, they need to replace it with something else, otherwise there'll be a huge vacuum."

An endangered cultural mix

The island's incense-scented Buddhist temples, green mosque, and Malay kampong, or village, make this Australian-owned speck of rock the least Australian place imaginable.

More than three-quarters of Christmas Island's inhabitants are ethnic Chinese and Malays. They are the descendants of indentured servants brought in by the British from China and Southeast Asia in the late 19th century.

Almost all the mine employees are ethnic Chinese, while the Malays run the island's port and the phosphate-loading docks.

Jimmy Yeow came to Christmas Island from Malacca, Malaysia, 37 years ago and has worked in the mine ever since. "It's crazy to close down the mine just because of a few bats. I've never even seen the ... things anyway," he says.

The head of the miners' union, Gordon Thomson, says two-thirds of Christmas Island is already protected as a national park.

Even though phosphate mining turns virgin rain forest into a virtual moonscape where nothing but scrub will grow, sacrificing 670 acres of forest – 2 percent of the island's land mass – would have been justified in order to maintain the population, he argues.

"The community will now slowly disintegrate," Mr. Thomson says in his office in Poon San. "We are already seeing some Chinese and Malay families move to Perth," the capital of the Territory of Western Australia.

A victory for conservationists

But many other islanders have welcomed the mining ban and hailed it as a victory for conservationists.

They say the new mine would have killed tens of thousands of the 60 million red land crabs for which the island is best known.

The crabs – handsome scarlet creatures – are everywhere on Christmas Island: in the forest, on the roads and beaches, in people's homes and gardens, even in the public toilets on the sea front, skittering in and out of the cubicles.

Each year they go into a breeding frenzy, turning the island into a moving carpet of crimson as they scuttle from the forest to the sea and back again.

It has been described as one of the greatest wildlife migration spectacles on the planet and led British naturalist Sir David Attenborough to dub the island the "kingdom of the crabs."

Christmas Island's 'death knell'?

In its complaint to a Canberra court two weeks ago, Phosphate Resources said that none of its proposed mining expansion would impede on protected lands.

"He obviously did not have complete information provided to him and did not consider all the relevant facts, scientific and socioeconomic evidence that was made available to the Commonwealth by the company," said Phosphate Resources Chairman Clive Brown of Mr. Turnbull, Australia's environment minister.

The decision, said Mr. Brown, could "spell the death knell" of the island's economy and varied cultural community.

Brown said that if the Australian government were to allow the expansion, it would extend the life of the island's mines and export operations to 10 to 12 years from five to seven years.

Tapping into tourism

The antimining lobby would like to see the tiny territory develop as an eco-tourist destination.

They hope the end of mining will enhance Christmas Island's boast as the Galapagos of the Indian Ocean.

Its unique wildlife, including red-footed booby birds, golden bosun birds, and robber crabs – the world's largest invertebrate – have almost no fear of humans and can be easily approached.

So far, tourism is in its infancy. Flights are expensive from Australia – a return flight from Perth can cost as much as A$1,800 (US$1,550), and from Sydney up to A$2,800 (US$2,400).

The island currently attracts around 1,500 tourists a year – many of them bird watchers and divers hoping to swim with whale sharks, the ocean's biggest fish.

"We are never going to be a mass tourism destination," concedes Linda Cash, marketing manager for the island's tourism association. "We have to concentrate on niche markets. Singapore is closer than Australia, so we want to concentrate on attracting more Asian tourists."

Neil Lucas, the current administrator appointed by Queen Elizabeth II, believes the future of Christmas Island lies in a new age of ecotourism, rather than the heavy extractive industry of the past.

"We have reasonably priced flights from Singapore, and there are a lot more people living to our north than to our east [in Australia]," he said from his office overlooking Flying Fish Cove and the dusty phosphate-loading docks.

"We have a natural wonderland in marine and terrestrial life, which really makes us the Galapagos of the Indian Ocean. The challenge is to get that message over to people."

A History of Christmas Island

1643 - Named by the captain of a British merchant ship as he sailed past it on Christmas Day

1887 - High grade phosphate found in rock samples

1888 - Proclaimed part of the British Empire

1890s - Chinese and Malays brought in to work on the mine and as stevedores

World War II - Occupied by the Japanese

1958 - Transferred from the Colony of Singapore to Australia

April 2007 - Ban on any further phosphate mining announced by Australian government